CBS Outdoor shares climb 5% in first trading day

CBS President and CEO Leslie Moonves, center, and CBS Outdoor Americas Inc. CEO Jeremy Male, left, stop at the post on the floor of the New York Stock Exchange, before CBS Outdoor's IPO on Friday.

CBS President and CEO Leslie Moonves, center, and CBS Outdoor Americas Inc. CEO Jeremy Male, left, stop at the post on the floor of the New York Stock Exchange, before CBS Outdoor's IPO on Friday. (Richard Drew / Associated Press)

“The reaction so far has been positive so we're obviously very pleased,” Jeremy Male, chief executive of CBS Outdoor Americas, said in an interview.

For now, parent CBS Corp. is retaining roughly 80% of the billboard company. But the New York broadcasting behemoth plans to completely divest the unit by year's end. At that time, CBS Outdoor will be converted to a real estate investment trust, which carries tax advantages for investors.

The outdoor division has been a steady eddy within CBS, with revenue for the unit up slightly last year to $1.29 billion.

"We are confident that we can keep growing our slice of the media pie,” Male said. “More people are connecting with media out-of-home with their smart devices. And people are eating out more and their commute times have gotten longer -- which has helped to drive our audience up.”

The conversion to digital signs also has helped fuel the sector's gains, Kantar Media said.

At CBS Outdoor, digital signs made up just 1.5% of its total signs -- but contributed 10% of the division's revenue, Male said.

“We're going to keep building our digital sign business,” Male said, adding that because digital signs can be updated quickly they are “far more timely and valuable” to advertisers.

CBS expects about $2 billion in proceeds from the IPO and an additional $1.6 billion, which was raised in January through a bond offering and debt financing for the outdoor business. Friday's trading placed the value of the CBS Outdoor shares around $3.6 billion.

After it divests the outdoor unit, slightly more than half of CBS revenue will be derived from advertising.

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